DAILY MARKET COMMENTARY
30 November 2009
Monday
Fundamental Outlook at 1500 GMT (EDT + 0500)
€
The euro gained ground vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.5085 level and was supported around the $1.4960 level. U.S. equities clawed back from earlier losses as dealers apparently discounted last week's Dubai World news as a manageable issue at this time. Dubai World, Dubai's largest corporate entity, asked creditors for a six-month standstill agreement on up to US$ 60 billion in debt that it owes. There is some concern that there could be contagion into other emerging market economies but investors did not buy the U.S. dollar en masse like they did during last week's holiday-shortened trading. The Federal Reserve announced it will conduct "small-scale, real value" three-way reverse repurchase transactions in the coming weeks and called the policy moves " a matter of prudent advance planning" but added "no inference should be drawn about the timing of any change in the stance of monetary policy in the future." The three-party reverse repos will possibly be used by the Fed when it is ready to withdraw some of the US$ 1 trillion+ in liquidity that it has injected into the financial system. Data released in the U.S. today saw the ISM November Chicago Business Barometer improve to 56.1 from 54.2 in October, suggesting a double-dip recession is not likely. In eurozone news, November flash EMU-16 consumer prices was up 0.6% y/y, a reversal from October's decline of 0.1% y/y, and this represented the first year-on-year improvement since April. Ifo reported credit constraunts for German industry and trade worsened this month as a result of more restrictive lending policies by banks. German Chancellor Merkel today called on banks to expand their lending programs today. Euro bids are cited around the US$ 1.4720 level.
¥/ CNY
The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥85.85 level and was capped around the ¥87.05 level. Finance minister Fujii reported commitments to other Group of Seven countries regarding currency flexibility preclude him from unilateral intervention but said it may be used bilaterally or multilaterally. Bank of Japan Governor Shirakawa pledged "decisive" action to assist the economic recovery and pledged "to do its utmost to overcome deflation both in terms of monetary easing and ensuring the stability of the financial markets." Shirakawa and Prime Minister Hatoyama plan to meet later this week and there is speculation the latter may press the former for additional quantitative easing steps. On Friday, BoJ is said to have contacted Japanese and non-Japanese commercial banks on Friday to check exchange rate levels, a de facto verbal intervention that sometimes leads to actual intervention. Hatoyama yesterday ordered cabinet ministers to prepare plans to contend with the surging yen in supplementary budget plans being drawn up. Data released in Japan overnight saw October wages slide 1.7% y/y while the Q3 gross domestic product gap printed at -6.7%, up from -7.5% in Q2. Other data released overnight saw manufacturing PMI decline to 52.3 from 54.3. The Nikkei 225 stock index gained 2.91% to close at ¥9,345.55. U.S. dollar offers are cited around the ¥94.75 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥128.95 level and was capped around the ¥130.80 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥141.00 figure while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥85.55 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8235 in the over-the-counter market, down from CNY 6.8264. People's Bank of China advisor Fan Gang reported the Chinese economy will likely expand 8% to 9% in 2010. Chinese and European officials held a summit meeting in China but European officials including ECB President Trichet and Ecofin's Juncker apparently failed to convince China to change its yuan policy.
₤
The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6380 level and was capped around the $1.6590 level. GfK reported U.K. consumer confidence weakened this month for the first time since January, retreating to -17 from -13 in October. Also, October mortgage approvals were up 57,000 and the M4 money supply was up 1.6% m/m and 10.8% y/y. Other data saw U.K. consumer credit evidence its largest net decline in record in October, falling a net ₤579 million from September's -₤299 million fall. Also, CBI reported U.K. service sector firms registered an unexpected decline in both sales and profits in the three months to November. Bank of England Monetary Policy Committee member Posen said a double-dip recession is still a possibility in the U.K. and U.S. and said it is to early to begin exiting the BoE's quantitative easing policy. Cable bids are cited around the US$ 1.6155 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.9155 level and was supported around the ₤0.9070 level.
Technical Outlook at 1330 GMT (EDT + 0500)
(Bid Price) (Today's Intraday Range)
EUR/ USD 1.4993 1.5083, 1.4962
USD/ JPY 86.29 87.02, 85.85
GBP/ USD 1.6423 1.6592, 1.6379
USD/ CHF 1.0056 1.0075, 0.9993
AUD/USD 0.9141 0.9192, 0.9094
USD/CAD 1.0573 1.0614, 1.0532
NZD/USD 0.7129 0.7217, 0.7118
EUR/ JPY 129.42 130.80, 128.95
EUR/ GBP 0.9129 0.9153, 0.9072
GBP/ JPY 141.74 143.89, 141.02
CHF/ JPY 85.79 86.77, 85.53
Support Resistance Support Resistance
EUR/ USD USD/ JPY
L1. 1.4470 1.4915 88.60 93.30
L2. 1.4355 1.5140 87.10 95.50
L3. 1.4175 1.5360 86.10 98.85
GBP/ USD USD/ CHF
L1. 1.6115 1.6685 1.0275 1.0580
L2. 1.5720 1.6830 1.0040 1.0695
L3. 1.5405 1.7040 0.9750 1.0885
AUD/ USD USD/ CAD
L1. 0.8450 0.8830 1.0535 1.0945
L2. 0.8300 0.9050 1.0365 1.1125
L3. 0.8070 0.9120 1.0155 1.1355
NZD/ USD EUR/ JPY
L1. 0.6880 0.7125 131.45 135.75
L2. 0.6750 0.7260 129.75 136.90
L3. 0.6535 0.7395 127.00 138.75
EUR/ GBP EUR/ CHF
L1. 0.8795 0.8995 1.5110 1.5380
L2. 0.8675 0.9105 1.4905 1.5580
L3. 0.8320 0.9225 1.4670 1.5880
GBP/ JPY CHF/ JPY
L1. 146.10 152.50 86.30 88.65
L2. 142.05 157.75 85.40 90.10
L3. 135.70 161.70 81.55 91.60
SCHEDULE
Sunday, 29 November 2009
all times GMT
(last release in parentheses)
2145 NZ October building permits (3.3% m/m)
2330 Australia November TD Securities inflation (-0.3% m/m)
2330 Australia November TD Securities inflation (1.2% y/y)
2350 Japan October industrial production (1.4% m/m)
2350 Japan October industrial production (-18.9% y/y)
Monday, 30 November 2009
all times GMT
(last release in parentheses)
0000 Australia October new home sales (-4.5% m/m)
0001 UK November GfK consumer confidence (-13)
0001 UK November Hometrack housing survey (0.2% m/m)
0001 UK November Hometrack housing survey (-4.2% y/y)
0030 Australia Q3 inventories (-3.1%)
0030 Australia October private sector credit (0.1% m/m)
0030 Australia October private sector credit (1.7% y/y)
0100 Japan Bank of Japan Governor Shirakawa speaks
0130 Japan October labour cash earnings (-1.8% y/y)
0500 Japan October housing starts (-37.0% y/y)
0500 Japan October housing starts, annualized (699,000)
0500 Japan October construction orders (-14.0% y/y)
0745 France October producer prices (-0.3% m/m)
0745 France October producer prices (-8.1% y/y)
0930 UK October mortgage approvals (56,200)
0930 UK October net consumer credit (-₤300 million)
0930 UK October net lending secured on dwellings (₤900 million)
0930 UK October M4 money supply (1.8% m/m)
0930 UK October M4 money supply (11.0% y/y)
1000 Italy November consumer price index
1000 Italy October producer price index
1000 Eurozone November consumer price index, estimate (0.1% y/y)
1330 Canada Q3 gross domestic product, annualized (-3.4%)
1330 Canada September gross domestic product (-0.1% m/m)
1330 Canada October industrial product prices (-0.5% m/m)
1330 Canada October raw materials price index (-1.1% m/m)
1445 US November Chicago purchasing managers' index (54.2)
2230 Australia November performance of manufacturing index (51.7)
Tuesday, 1 December 2009
all times GMT
(last release in parentheses)
N/A Japan November official reserve assets (US$ 1.056 trillion)
N/A Germany October retail sales (-0.2% m/m)
N/A Germany October retail sales (-3.9% u/u)
N/A UK November Nationwide house prices (0.4% m/m)
N/A UK November Nationwide house prices (2.0% y/y)
0030 Australia October building approvals (2.7% m/m)
0030 Australia October building approvals (11.7% y/y)
0330 Australia Reserve Bank of Australia interest rate decision
0500 Eurozone October unemployment rate (9.7%)
0645 CH Q3 gross domestic product (-0.3% q/q)
0645 CH Q3 gross domestic product (-2.0% y/y)
0830 CH November purchasing managers' index (54.0)
0845 Italy November PMI, manufacturing (49.2)
0850 France November PMI, manufacturing
0855 Germany November PMI, manufacturing
0855 Germany November unemployment change (-26,000)
0900 Eurozone November PMI, manufacturing
0930 UK November PMI, manufacturing (53.7)
1500 US November ISM, prices paid (65.0)
1500 US October pending home sales (6.1% m/m)
1500 US October construction spending (0.8% m/m)
1500 US November ISM manufacturing (65.0)
1700 US Philadelphia Fed President Plosser speaks
2350 Japan November monetary base (4.4% y/y)
Wednesday, 2 December 2009
all times GMT
(last release in parentheses)
0930 UK November PMI, construction (46.2)
1000 Eurozone October producer price index (-0.4% m/m)
1000 Eurozone October producer price index (-7.7% y/y)
1315 US November ADP employment change (-203,000)
1730 US Richmond Fed President Lacker speaks
1900 US Fed Beige Book
2330 Australia November performance of service index (54.8)
2350 Japan Q3 capital spending (-21.7%)
Thursday, 3 December 2009
all times GMT
(last release in parentheses)
0130 Australia October retail sales (-0.2% m/m)
0200 Australia November ANZ commodity prices (4.6%)
0745 France Q3 ILO unemployment rate (9.5%)
0845 Italy November PMI, services
0850 France November PMI, services
0855 Germany November PMI, services
0900 Eurozone November PMI, services
0930 UK November PMI, services (56.9)
1000 Eurozone Q3 gross domestic product (0.4% q/q)
1000 Eurozone Q3 gross domestic product (-4.1% u/u)
1000 Eurozone October retail sales (-0.7% m/m)
1000 Eurozone October retail sales (-3.6% y/y)
1245 Eurozone European Central Bank interest rate decision
1330 US Q3 non-farm productivity (9.5%)
1330 US Weekly initial jobless claims
1330 US Continuing jobless claims
1500 US November ISM, non-manufacturing (50.6)
Friday, 4 December 2009
all times GMT
(last release in parentheses)
N/A UK November Halifax house prices (1.2% m/m)
N/A Canada November employment, net change (-43,200)
N/A Canada November unemployment rate (8.6%)
0815 CH November consumer price index (0.6% m/m)
0815 CH November consumer price index (-190,000)
1330 US November non-farm payrolls, net change (-190,000)
1330 US November unemployment rate (10.2%)
1330 US November average hourly earnings (0.3% m/m)
1330 US November average hourly earnings (2.4% y/y)
1330 US November average weekly hours (33.0)
1500 US October factory orders (0.9%)
1500 US Philadelphia Fed President Plosser speaks
1500 Canada November Ivey purchasing managers index (61.2)
1815 US St. Louis Federal Reserve President Bullard speaks
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